It wasn't that long ago that Flight Centre Travel Group Ltd (ASX: FLT) shares were a favourite of income investors.
Prior to the pandemic, the travel agent was regularly sharing approximately 60% of its earnings with shareholders each year.
However, as with most ASX travel shares, at the height of the pandemic, management was forced to conserve capital and cancel the payment of the Flight Centre dividend. It hasn't been seen since.
Back in March 2020, Flight Centre's managing director, Graham Turner, stated:
Cancelling the dividend was not a decision that was taken lightly, but we felt it was appropriate to preserve cash and protect long-term shareholder value, given the current uncertainty and the unprecedented actions that governments have been forced to adopt to slow the coronavirus's spread.
So, with Flight Centre recently upgrading its underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) guidance for FY 2023 to between $270 million and $290 million, investors may be wondering if it is time for the Flight Centre dividend to make a reappearance.
Image source: Getty Images
When will the Flight Centre dividend return?
I have some good news for you. According to a recent note out of Citi, its analysts believe that Flight Centre could be in a position to start paying a dividend from the next financial year.
The note reveals that Citi is forecasting a fully franked 32 cents per share dividend for FY 2024.
However, with the Flight Centre share price currently fetching $21.07, this will only mean a modest yield of 1.5% for investors.
But don't worry, the broker expects a large bump to the travel agent's dividend the following year. It is forecasting a fully franked 79 cents per share dividend for FY 2025, which equates to a much more attractive yield of 3.75%.
All in all, it could pay to be patient with this ASX travel share.
